8-K: American Healthcare REIT Boosts 2025 Guidance After Strong Q1 Performance

American Healthcare REIT announces increased full-year 2025 guidance following a strong first quarter, driven by robust Same-Store NOI growth and accretive capital markets activity.

Summary

• American Healthcare REIT reported a GAAP net loss attributable to controlling interest of $(6.8) million, or $(0.04) per diluted share, for the first quarter of 2025.
• Normalized Funds from Operations (NFFO) attributable to common stockholders was $0.38 per diluted share for the same period.
• The company achieved a total portfolio Same-Store Net Operating Income (NOI) growth of 15.1% compared to the first quarter of 2024.
• Specifically, Same-Store NOI growth was 30.7% for senior housing operating properties (SHOP) and 19.8% for integrated senior health campuses (ISHC).
• A lease buyout in the ISHC segment was completed for approximately $16.1 million.
• The company issued 1,577,113 shares of common stock through its at-the-market equity offering program (ATM program) for gross proceeds of approximately $47.7 million.
• Total portfolio Same-Store NOI growth guidance for 2025 has been increased to a range of 9.0% to 13.0%.
• NFFO guidance for 2025 has been raised to a range of $1.58 to $1.64 per diluted share.
• Net Debt-to-Annualized Adjusted EBITDA was reported as 4.5x as of March 31, 2025.
• The company has a pipeline of over $300 million in new potential acquisitions.
• The company's total in-process development pipeline is expected to cost approximately $60.0 million, of which $19.7 million has been spent as of March 31, 2025.
• As of March 31, 2025, the company's total consolidated indebtedness was $1.67 billion, and it had approximately $634.5 million of total liquidity.

Sentiment

Score: 8

Explanation: The document presents a generally positive outlook, driven by strong operational performance and increased guidance. While a net loss was reported, the underlying metrics and future expectations are encouraging.

Positives

• Strong Same-Store NOI growth, particularly in the SHOP and ISHC segments, indicates effective operational performance.
• Increased full-year guidance reflects management's confidence in continued growth.
• Accretive capital markets activity, including the ATM program, strengthens the balance sheet.
• The $16.1 million lease buyout in the ISHC segment could lead to improved operational efficiency.
• A robust acquisition pipeline suggests potential for future growth.
• The company's Net Debt-to-Annualized Adjusted EBITDA was 4.5x as of March 31, 2025.
• The company has $634.5 million of total liquidity.

Negatives

• The company reported a GAAP net loss attributable to controlling interest of $(6.8) million for Q1 2025.
• Triple-Net Leased Properties experienced a Same-Store NOI decline of 1.4%.

Risks

• The company's forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.
• The company cannot guarantee that it will close on all or any of the potential acquisitions in its pipeline.
• The company is unable to provide guidance for the most comparable GAAP financial measures of total revenues and property operating and maintenance expenses.
• The company is unable to reasonably predict certain items contained in the GAAP measures, including non-recurring and infrequent items that are not indicative of the company's ongoing operations.

Future Outlook

The company is increasing its full-year 2025 guidance for total portfolio Same-Store NOI growth to a range of 9.0% to 13.0% and NFFO guidance to a range of $1.58 to $1.64 per diluted share.

Management Comments

• The year is progressing as planned, and we have successfully raised capital at attractive prices to support our anticipated external investments and development initiatives, all while preserving ample capacity to pursue opportunistic growth, said Danny Prosky, the Company's President and Chief Executive Officer.
• Despite a challenging winter season, strong demand for long-term care led to great performance for our diversified healthcare portfolio, as demand helped mitigate any previously anticipated occupancy losses during the quarter.
• Our regional operating partners played a critical role in delivering high-quality care during this period, particularly within our higher-acuity long-term care settings.
• For the balance of 2025, we expect demand to continue strengthening as we enter the warmer spring and summer selling seasons.
• Our operating portfolio segments performed well to start the year, and the benefits of Trilogy catering to various levels of long-term care proved to benefit our first quarter performance, which is usually a period of lower growth, said Gabe Willhite, the Company's Chief Operating Officer.
• Demand across our campuses and properties for post-acute care skilled nursing beds helped offset the impacts from the colder winter months that we contemplated during the first quarter.
• As we continue to execute our strategy throughout the remainder of the year, we remain focused on capturing the growing demand for long-term care and leveraging Trilogys platform to drive additional efficiencies across our operating portfolio.
• During the first quarter, we took advantage of a favorable cost of capital by continuing to enhance our balance sheet to support our external growth plans, said Brian Peay, the Company's Chief Financial Officer.
• In addition, demand within our ISHC segment exceeded the growth expectations we previously contemplated in the first quarter, coupled with the strong foundation we've built in our SHOP segment to capture demand in the busier spring and summer selling seasons, are enabling us to raise our full-year 2025 NOI growth and earnings guidance.
• These updates reflect both Trilogys strong operating performance and the accretive capital markets activity we executed early in the year.

Industry Context

The healthcare REIT sector is influenced by demographic trends, regulatory changes, and the demand for senior care services. American Healthcare REIT's focus on senior housing, skilled nursing, and outpatient medical buildings positions it to capitalize on the aging population and the increasing need for healthcare facilities.

Comparison to Industry Standards

• Comparing American Healthcare REIT's performance to other healthcare REITs such as Welltower (WELL), Ventas (VTR), and Healthpeak Properties (PEAK) would provide a broader context.
• For example, assessing AHR's Same-Store NOI growth against the average growth rates of its peers would indicate its relative operational efficiency.
• Similarly, comparing its Net Debt-to-Annualized Adjusted EBITDA ratio to the industry average would provide insights into its financial leverage.
• Comparing AHR's occupancy rates in its various segments (ISHC, SHOP, Outpatient Medical, Triple-Net Leased) to the average occupancy rates of comparable properties managed by competitors would provide insights into its operational efficiency and market positioning.
• For example, if Welltower reports an average SHOP occupancy of 87% and AHR reports 85.5%, this would suggest AHR has room for improvement in this segment.
• Comparing AHR's RevPOR in its SHOP segment to that of competitors like LTC Properties (LTC) would provide insights into its pricing strategy and revenue generation capabilities.
• If LTC reports a RevPOR of $5,500 and AHR reports $5,246, this would suggest AHR may have opportunities to increase its revenue per occupied room.
• Comparing AHR's tenant rent coverage in its Triple-Net Leased segment to that of competitors like National Health Investors (NHI) would provide insights into the financial health of its tenants and the stability of its rental income.
• If NHI reports an average tenant rent coverage of 1.5x and AHR reports 1.47x, this would suggest AHR's tenants may be slightly more financially strained.
• Comparing AHR's cost of capital and capital allocation strategies to those of its peers would provide insights into its financial management and growth potential.
• For example, if AHR is able to raise capital at a lower cost than its competitors, it may have a competitive advantage in pursuing acquisitions and development projects.

Stakeholder Impact

• Shareholders will likely react positively to the increased guidance and strong Same-Store NOI growth.
• Employees may benefit from the company's continued growth and expansion.
• Customers (residents and patients) should experience improved services and facilities as a result of the company's investments.
• Suppliers and creditors can expect continued business and financial stability from the company.

Next Steps

• The company will host a webcast and conference call on May 9, 2025, to review first quarter 2025 results.
• The company remains active in pursuing new external growth opportunities through various channels.
• The company expects to spend $80 million to $100 million for new development starts and on-going development projects.
• The company expects to close ~$86.4 million of investments in the first half of 2025.

Key Dates

Keywords

American Healthcare REIT, REIT, Healthcare, Senior Housing, Skilled Nursing, Outpatient Medical, Earnings, NFFO, Same-Store NOI, Guidance, Acquisition, Development